Deutsche Bank AG has sold its British insurance business Abbey Life Assurance Co to Phoenix Group Holdings PLC as it sheds non-core assets and reduces its balance sheet in an effort to reassure anxious investors and meet regulators’ demands.
Phoenix, Britain’s largest owner of life insurance funds closed to new customers, is paying £935 million (US$1.22 billion) for the unit which manages assets worth £10 billion and has 735,000 policyholders, the companies said.
Although the deal announced yesterday will result in a pre-tax loss of about 800 million euros (US$896.26 million) in the first quarter, mainly from writedowns for Deutsche Bank, it will lift the German lender’s capital ratio by 10 basis points.
The sale was a rare piece of good news for Deutsche Bank investors and the bank’s shares had risen 3.1 percent by 7:42am in London, recovering from a record low on Tuesday when the stock was hit by continuing concerns about the health of the financial industry in Europe’s largest economy.
Deutsche Bank AG chief executive officer John Cryan told Germany’s Bild that he had not asked for state aid following a report that Deutsche had asked Berlin for help to deal with a US$14 billion demand from the US Department of Justice.
Regulatory changes and rock-bottom interest rates have ramped up pressure on banks to deal with their legacy books, leading many to consider putting them up for sale.
The interest rate cut that followed Britain’s vote to leave the EU has squeezed returns on investments for companies that manage closed life insurers.
Germany’s largest bank, which is in the midst of a deep overhaul, is trying to cut its balance sheet dramatically as it seeks to comply with stricter rules demanding lenders hold more capital against any assets.
Run off specialist Phoenix said it would raise £735 million via a rights issue and use £250 million from a new bank facility to fund the purchase.
Phoenix Group chief executive officer Clive Bannister last month said that the company was scouting for acquisitions to help gain scale in a challenging, low interest rate environment.
Phoenix was particularly interested in buying profit-making UK businesses as acquisitions would help realize savings by managing a larger number of policies more efficiently.
Earlier, French insurer AXA SA sold its UK investment and pensions business to Phoenix for £375 million, completing a well-flagged exit from a mature life assurance market to focus on faster growing emerging economies.
Taiwan Transport and Storage Corp (TTS, 台灣通運倉儲) yesterday unveiled its first electric tractor unit — manufactured by Volvo Trucks — in a ceremony in Taipei, and said the unit would soon be used to transport cement produced by Taiwan Cement Corp (TCC, 台灣水泥). Both TTS and TCC belong to TCC International Holdings Ltd (台泥國際集團). With the electric tractor unit, the Taipei-based cement firm would become the first in Taiwan to use electric vehicles to transport construction materials. TTS chairman Koo Kung-yi (辜公怡), Volvo Trucks vice president of sales and marketing Johan Selven, TCC president Roman Cheng (程耀輝) and Taikoo Motors Group
Among the rows of vibrators, rubber torsos and leather harnesses at a Chinese sex toys exhibition in Shanghai this weekend, the beginnings of an artificial intelligence (AI)-driven shift in the industry quietly pulsed. China manufactures about 70 percent of the world’s sex toys, most of it the “hardware” on display at the fair — whether that be technicolor tentacled dildos or hyper-realistic personalized silicone dolls. Yet smart toys have been rising in popularity for some time. Many major European and US brands already offer tech-enhanced products that can enable long-distance love, monitor well-being and even bring people one step closer to
RECORD-BREAKING: TSMC’s net profit last quarter beat market expectations by expanding 8.9% and it was the best first-quarter profit in the chipmaker’s history Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), which counts Nvidia Corp as a key customer, yesterday said that artificial intelligence (AI) server chip revenue is set to more than double this year from last year amid rising demand. The chipmaker expects the growth momentum to continue in the next five years with an annual compound growth rate of 50 percent, TSMC chief executive officer C.C. Wei (魏哲家) told investors yesterday. By 2028, AI chips’ contribution to revenue would climb to about 20 percent from a percentage in the low teens, Wei said. “Almost all the AI innovators are working with TSMC to address the
Malaysia’s leader yesterday announced plans to build a massive semiconductor design park, aiming to boost the Southeast Asian nation’s role in the global chip industry. A prominent player in the semiconductor industry for decades, Malaysia accounts for an estimated 13 percent of global back-end manufacturing, according to German tech giant Bosch. Now it wants to go beyond production and emerge as a chip design powerhouse too, Malaysian Prime Minister Anwar Ibrahim said. “I am pleased to announce the largest IC (integrated circuit) Design Park in Southeast Asia, that will house world-class anchor tenants and collaborate with global companies such as Arm [Holdings PLC],”